Skip to content


Harry Cassin
Publisher and Editor

Andy Spalding
Senior Editor

Jessica Tillipman
Senior Editor

Bill Steinman
Senior Editor

Richard L. Cassin
Editor at Large

Elizabeth K. Spahn
Editor Emeritus

Cody Worthington
Contributing Editor

Julie DiMauro
Contributing Editor

Thomas Fox
Contributing Editor

Marc Alain Bohn
Contributing Editor

Bill Waite
Contributing Editor

Shruti J. Shah
Contributing Editor

Russell A. Stamets
Contributing Editor

Richard Bistrong
Contributing Editor

Eric Carlson
Contributing Editor

Wendt and Sultan: What are ‘oral downloads’ to the SEC and why do they matter?

A fascinating discovery dispute arose recently in the Southern District of Florida for professionals focused on internal investigations and the negotiation of resolutions with the SEC and DOJ. It involved the SEC, two former executives from General Cable Corporation, and General Cable’s external counsel Morgan, Lewis & Bockius LLP.

The discovery dispute — now rendered moot by an agreement between the former executives and Morgan Lewis –– provides an interesting study on whether and how external counsel can navigate the difficult terrain when offering to cooperate with the SEC or DOJ or both on behalf of corporate clients whose employees themselves may become targets of subsequent civil or criminal actions. 

The various twists and turns are noteworthy because full cooperation, including specifically the disclosure of “all facts relevant to the wrongdoing at issue, including: all relevant facts gathered during a company’s independent investigation,” is critical under recent revisions to the U.S. Attorney’s Manual.

We summarize the key elements of the case here in three posts. 

This post covers the defendants’ motion to compel Morgan Lewis to provide interview memoranda and other documents from the law firm’s internal investigation. 

The second post covers the responses by Morgan Lewis and the magistrate judge’s initial decision that the work product protection had been waived, at least in part. 

And the third post summarizes the developments in the aftermath of that decision, including the plans for a hearing that apparently led the parties to reach a resolution, rendering the motion to compel moot.

Background on General Cable’s investigations and resolutions. General Cable, a worldwide manufacturer, distributor, and installer of cable and wire, is headquartered in Kentucky and listed on the New York Stock Exchange.  In October 2012, General Cable announced that it had identified accounting errors related to its Brazilian operations and that it intended to issue a restatement of financials.  General Cable retained Morgan Lewis to conduct an internal investigation and disclosed its accounting errors to the SEC, which launched its own investigation.

More than a year later — in January 2014 — General Cable reported to the SEC and DOJ that the company had also identified potentially improper payments under the FCPA by its Angolan subsidiary. According to the SEC, the agency’s investigation then expanded to include potentially improper payments by several General Cable subsidiaries (but not Brazil).  According to court filings, Morgan Lewis represented General Cable for the full investigation.

In December 2016, General Cable and the SEC entered into two settlements.  In the first (the Accounting Order), the SEC filed a cease and desist order finding that General Cable had violated securities laws by misstating financial statements after the Company failed to detect an inventory theft scheme in Brazil. The order cited the accounting provisions of the FCPA obligating issuers to keep accurate books and records and have adequate internal accounting controls, but it is generally considered an accounting resolution because it did not involve improper payments.

In the second settlement (the FCPA Order), the SEC filed a cease and desist order finding that General Cable had violated the FCPA through payments made by subsidiaries in Angola, Portugal, Thailand, China and Egypt.  The DOJ also reached a non-prosecution agreement with General Cable on the same date regarding improper payments by third parties.  

SEC charges against individuals. One month later, the SEC brought charges against three former General Cable executives based in Southern Florida who had been responsible for General Cable’s operations in Brazil (among other international operations). In general, the SEC alleged that the defendants had cooperated to conceal the accounting fraud in Brazil after its discovery in late 2011.

One executive consented to a negotiated judgment, while the other two executives — Mathias Francisco Sandoval Herrera, the former CEO for the region, and Maria D. Cidre, the former CFO for the region — decided to litigate. Perhaps setting the tone for scorched-earth litigation among the parties, the SEC alleged in the Complaint that these two executives had been in a “romantic relationship” during their tenure with General Cable and quoted from affectionate emails between them.

The work-product dispute. On Halloween last year, Sandoval and Cidre filed a motion to compel third party General Cable’s external counsel — Morgan Lewis — to produce notes and memoranda generated during the firm’s internal investigation of General Cable. 

In particular, defendants sought

(1) Morgan Lewis’s notes from a meeting with the SEC from October 2013 in which Morgan Lewis had discussed several investigation interviews (dubbed “oral downloads” of witness interviews), and

(2) Morgan Lewis’s notes and memoranda from the underlying interviews themselves, to the extent the notes were shared with the SEC or General Cable’s external auditor, Deloitte.

We note that while Morgan Lewis had initially asserted that many of the interview notes and memoranda involved were protected by the attorney-client privilege, this issue did not surface in the litigation, presumably because Deloitte’s access to the memos (discussed below) and/or the oral downloads to the SEC created a waiver. Thus, the only issue in the motion to compel was whether the work product protection had been waived. 

Evidence of disclosures to the SEC. The defendants’ motion to compel pointed to an interesting array of materials . First, defendants quoted the SEC’s Accounting Order itself, in which the SEC stated that General Cable had provided “interview downloads” as part of its “complete and timely cooperation.” 

Second, defendants attached a PowerPoint presentation that Morgan Lewis had used during a meeting with the SEC on the accounting investigation — summarizing its process (including a list of most interviews) and its findings (one bullet stated that Morgan Lewis had “determined through interviews” that some inventory was not delivered).

Third, defendants included emails between the SEC and Morgan Lewis, in which (1) the SEC requested “an oral recitation of what each (relevant) witness stated during interviews,” and (2) Morgan Lewis emailed the SEC with a request to reschedule a “debriefing session on interviews.”

Fourth, Morgan Lewis had also prepared a privilege log stating that 12 interviews were discussed with the SEC in an October 2013 meeting.

And fifth, defendants included a letter from the SEC stating that it did “not intend to produce the notes we took of meetings with Morgan Lewis in which counsel relayed the content of witness interviews that the firm [had] conducted” and that Morgan Lewis presentations to the SEC and DOJ had contained “statements of certain interviewees.”  

Evidence of Disclosures to the External Auditor. According to defendants, Morgan Lewis had provided even more information about its interviews to Deloitte. Defendants attached emails in which Morgan Lewis agreed to Deloitte’s plan for Morgan Lewis to read interview notes to Deloitte.

Defendants had also acquired notes from Deloitte’s team stating that Morgan Lewis had “read [its] investigative report to Deloitte in order to maintain privilege,” that the report was “substantially detailed,” and that this report included “details around interviews.”

Moreover, defendants attached Deloitte’s Investigative Advisory Process Memo summarizing its review of Morgan Lewis’s investigation, in which Deloitte stated that it reviewed “interview notes for all interviews by” Morgan Lewis plus the firm’s “[s]ummary memo of allegations and … findings”, but that Deloitte had not retained copies “due to privilege and other considerations.” 

Later, however, Deloitte stated in the same memo that Morgan Lewis did not provide “interview notes,” citing “client attorney privilege,” but that Deloitte “did have several oral discussions with [Morgan Lewis] during which [the firm] described questions and responses from their interviews.” 

Defendants’ arguments. Sandoval and Cidre first argued that Morgan Lewis had waived work product privilege for at least 12 investigation interviews when it orally downloaded key takeaways from the interview memoranda to the SEC because the SEC was General Cable’s adversary, citing cases that equated oral summaries of interviews with an actual production of interview notes. Defendants also argued that the PowerPoint presentation — because it included specific references to witness statements — also constituted a waiver. And the defendants argued that it would be very difficult and costly to conduct its own interviews of the relevant personnel (many of whom were based in Brazil).  At a minimum, defendants asked the court to review the notes from October 2013 to determine what was disclosed to the SEC. 

Regarding Deloitte, Sandoval and Cidre acknowledged numerous cases in which an external auditor was found to have a common interest with its client. But defendants argued that the disclosures to Deloitte were different because Deloitte “was on the SEC’s radar and entered into a tolling agreement with the SEC regarding its own conduct.” According to defendants, this tolling agreement — requested by the SEC in December 2013 — made Deloitte a potential adversary to General Cable, as well as a potential conduit of information to the SEC. For these reasons, defendants sought access to all interviews made available to Deloitte. 

In sum, defendants sought all notes, memoranda, etc., from any presentations to the SEC, notes and memoranda from various interviews, and the investigative report that Morgan Lewis had shared with Deloitte.


Daniel Patrick Wendt, pictured above left, is a Member in Miller & Chevalier’s International Department. He focuses on matters involving the FCPA. 

Ann Sultan, right, is Counsel with Miller & Chevalier’s International Department. Her practice focuses on international corporate compliance and white collar defense related primarily to the FCPA.

Share this post


Comments are closed for this article!